Morgan’s siting the usual suspects of India and China providing a game change to the petro chemicals industry.
And here a view of the oil refineries currently under construction across Asia. These refineries will add 70mbpd for 2011 or an addition 1.5mbpd refinery capacity. By 2016 Asia will have added an additional 12.5mbpd of capacity. If this capacity is used, clearly as they expect it to be, world oil demand would exceed 100mbpd by 2016.
Anyone see a problem with this capacity addition? Take a look at IEA recent oil production forecasts.. they don’t make for easy reading.. and this is the IEA remember. (Alternatively take a look at the recent reports posted here on capitalsynthesis. Personally i don’t believe we are close to peak oil but we are very close, imo, to peak cheap oil. Oil is getting deeper and more complicated to produce. The middle eastern reserves are a sham. Progressively more expensive energy is yet another reason why inflation is unlikely to be subdued. If governments respond to rising energy prices by stimulating, which doubtless they will do as governments are uniformly dumb we will see significantly higher energy prices and geo-political tension resulting from this.
All the best